Bitcoin and the Scaling Debate - Bitcoin v Bitcoin Cash

On 1 August 2017 Bitcoin split in two. The reason for the split was a difference in opinion on how the software of bitcoin should be changed to accommodate increased transaction volume.

The result is we now have ‘Bitcoin’ and ‘Bitcoin Cash’ and we have a total of 42 million bitcoins (21 million each). It is very important to understand that while they have similar names, they are different stand alone coins, think of them as cousins. However, unlike cousins, from a market perspective, it is possible only one bitcoin will survive in the long term.

People cite the Betamax, VHS video recorder battle as an example of better technology losing to a better marketed competitor. Thus far in the case of the bitcoin battle, Bitcoin is the clear leader on the marketing front, however, while good enough technology may be acceptable for a video recorded, it is not acceptable for a blockchain. The failure a blockchain is catastrophic (we have never seen this and I hope we never do) there are no product recalls, refunds or insurances for a blockchain.

This paper sets out in very easy to understand language the background to the split and why (in the opinion of the author of the paper) Bitcoin Cash may be the long term survivor. (Note there are equally strong opinions going the other way).

Featured Review
Tag Cloud